Shares of Yellow Media Inc. tumbled after the company said it would take a $2.9-billion goodwill impairment charge and halt its dividend payment.

The Montreal-based phone directory company said several factors contributed to the charge, including a fall in its common share price and pressure on its earnings due to the shift from printed directories to online.

On the TSX, shares of Yellow Media fell 29 cents, or almost 51 per cent, to end at 28 cents apiece.

The company said the charge will be reflected on its financial statements for the third quarter, which ends on Sept. 30.

Yellow Media also said it was suspending its dividend after the 2.5-cents-per-share dividend that was announced in August and is payable on Oct. 17. The company had previously cut its dividend to 15 cents a share from 65 cents annually.

The company said it is in its best interest to halt the dividend on its common shares. Money that would have been paid out to investors will be used to reduce the company's debt load.

"We are decisively taking action to reduce our debt," said company president and CEO Marc Tellier.

"The board, the management team and all our employees are focused on  the successful transformation of Yellow Media toward a digital media company."

Yellow Media is the largest telephone directory publisher in Canada. Its online properties include YellowPages.ca and Canada411.ca online telephone directories, and the CanadaPlus.ca group of major Canadian city websites.

The company publishes 340 telephone directories each year for Bell Canada, Telus, Bell Aliant, MTS Allstream and other telephone companies.